The transaction, which is likely to close in the fourth quarter of 2008, is expected to be accretive to Ameriprise Financial earnings and return on equity in 2009, the firm said in a statement.

New York-based Seligman manages about $18 billion in assets in open- and closed-end funds, hedge funds and institutional accounts. Founded in 1864, Seligman is a privately-held company that manages the US's first growth mutual fund and helped pioneer single-state municipal funds.

The acquisition will increase the amount of alternative assets run by Ameriprise, as Seligman oversees about $3 billion of such assets.

“Seligman is an excellent strategic fit for Ameriprise Financial,” said Jim Cracchiolo, chairman and chief executive officer of Ameriprise Financial. “We look forward to realising substantial benefits from Seligman’s experienced investment management team and broad retail, institutional and alternative asset distribution strengths.

“This transaction reinforces our growth strategy, and in particular our efforts to grow our higher-margin businesses. We are committed to prudent use of our capital, and we will continue to maintain strong capital and liquidity positions once this acquisition closes,” he said.

The acquisition will be funded through the use of cash in hand. The transaction is expected to have no impact on the company’s share repurchase programme. A majority of the anticipated synergies are expected to be realised through cost savings.

Seligman will retain its successful investment management teams and will continue to use its brand names under the RiverSource umbrella.

UBS Investment Bank acted as financial advisor and Ropes & Gray LLP acted as legal advisor for Ameriprise Financial. Merrill Lynch acted as financial advisor and Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor for Seligman.